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Individual Insurance Changes
What you need to know to prepare for 2015


By now, most have heard of the sweeping reform in the United States healthcare system called the Patient Protection and Affordable Care Act or ACA.  Most Americans will be affected in some way by the ACA, but those under 65 and without health insurance through an employer-sponsored health plan will be particularly affected.  Terms like “Exchange”, “Marketplace”, “Individual Mandate”, and “Subsidy” get thrown around all the time, but with so much constantly changing information and gray area with healthcare reform, these terms are often confusing and misunderstood.  It seems there is a newspaper piece covering a topic on the ACA almost daily, but if you are like most Americans, by the end you are more confused than you were when you started.  The purpose of this article is to hit on the main points that everyone should know regarding “Individual” health insurance under the ACA. 

Individual Health Insurance and the Individual Mandate

“Individual” major medical policies are available for individuals and families who don’t have coverage available through a government or employer-sponsored health plan.  Often people choose to purchase individual policies for themselves or family members because it is less expensive than an employer sponsored plan or the employer does not offer a group plan.  The “individual mandate” under ACA, requires most U.S. citizens to purchase ACA qualified major medical insurance or pay a penalty. 
So, what is the “Marketplace” and how is that different from the “Exchange”?  In the individual insurance world, they are synonymous.  Originally, the term “Exchange” was used to describe the purchasing of individual health insurance coverage though the healthcare.gov website, but it was soon changed to being called the “Marketplace”.  The main thing that people need to know about the Marketplace is that you MUST enroll through the “Marketplace” or the healthcare.gov website in order to qualify for a government subsidy.  Subsidies are available in the form of a premium tax credit or on a cost-sharing basis and determined by your household income, your dependent status and whether or not you are eligible for another government-sponsored or employer-sponsored health plan.  If you determine that you do NOT qualify for a subsidy, there is absolutely no reason to enroll through the Marketplace.  Going direct through a private carrier will be your best bet.  Talk with an insurance specialist at ANBTX Insurance Services to determine if you are eligible for a subsidy and need to apply though the marketplace or if it makes more sense to apply directly through the insurance carrier. 
 
Pre 2014, qualifying for individual health insurance coverage through a private insurance carrier could be very difficult or impossible for people with pre-existing medical conditions.  The ACA has addressed this problem by making all individual policies “Guarantee Issue”.  Medical underwriting is no longer part of the enrollment process when applying for major medical insurance.  Someone with cancer at any stage can apply and get covered on an ACA compliant plan.  Rates are now completely based on zip code and age.  The only thing that can affect someone’s insurance rate is whether or not they are a smoker.   A smoker can expect as much as a 25% increase in their premium rate.
 
What is the Open Enrollment Period and why is it important? 

Open Enrollment is the 2-3 month period every year where anyone can enroll on the major medical plan of their choice.  Again, this is guarantee issue coverage and you do not have to worry about being declined or being issued exclusion riders. The open enrollment period for 2015 begins on November 15th of 2014 and ends on February 15th of 2015.  Once enrolled on a plan, you are locked into that plan until the next year’s Open Enrollment.  Be careful which plan you choose, because outside of the Open Enrollment period, you cannot switch plans.  You can cancel the plan at anytime, but will again be subject to the Individual Mandate penalty if you go without medical insurance.
It cannot be stressed enough how important it is that people without coverage get enrolled on a plan during this period.  If you miss the Open Enrollment Period, you may be stuck with no insurance until the next year’s Open Enrollment Period.  Not only that, you will be subject to a penalty of $325 for an individual and $975 for a family, or 2% of your household income, whichever is greater.   Anyone making more than $16,300 in a year will be subject to the 2% of household income penalty.  For example, someone making $50k a year will be penalized $1,000 for not having insurance in 2015.  This is a very significant amount of money! 

Special Enrollment and Qualifying Events

There are certain instances where someone can enroll on an individual policy outside of the Open Enrollment Period.  These enrollments are called “Special Enrollments” and there must be a “qualifying event” happening in order to be eligible.  Some examples of qualifying events are as follows:
  • Losing medical coverage through an employer’s plan
  • Marriage or Divorce
  • Losing eligibility as a dependant due to reaching the maximum age
  • Exhausting COBRA benefits
Contact an insurance specialist at ANBTX Insurance Services to determine whether or not you have experienced a qualifying event for Special Enrollment.

Next Steps

The Affordable Care Act and the Individual Mandate appear to be here to stay so it is important to keep up on Open Enrollment dates and to understand your options.  The insurance specialists at ANBTX Insurance have knowledge and experience in dealing with all health plans both on and off the exchange.  They can explain the various details of these health plans and help you choose what is best for you and/or your family.  Call us today and we will walk you through the process. You can reach Will DeOre at 972-419-7545 or will.deore@anbtxinsurance.com.
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